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Marketing Week (MW): Where is the The Perfume Shop positioned within the fragrance market?

Michelle D’vaz (MD): We strive to be the authority in perfume, to lead, not just from a consumer point of view but within the industry. For us, it’s about enhancing the customer journey, making it seamless and enjoyable. Whether in-store, online or through our app, we want to give customers the best experience of our expertise.

One of our main competitors is Boots, which sells perfume in 2,000 stores. We have 250 stores and are close behind – second in the marketplace. Our sales density on the high street is very good.

Keran Fordham (KF): We’re known within the industry for being very good at servicing customers, but it’s not something we talk about much [in our marketing]. A lot of what we’re doing this year in our marketing is bringing that expertise and personality to the fore.

MW: Is the fragrance market buoyant?

KF: The market has slowed in the past couple of years, so it has been more challenging. We’ve succeeded because we’re good at tailoring our offers for our customers. Even though we’re part of a bigger group, we are quite nimble. We can make decisions quickly and are willing to trial new things. That’s quite powerful and sets us apart from some of our larger competitors.

MW: Are women your target market?

MD: People assume it’s 80:20 [in favour of women], but it’s not, it’s 50:50. We over-index in men. In the run-up to Christmas men will come in to buy a gift but a lot of the time they’re buying for themselves.

We’re approachable, unassuming and accessible and men like the service. They want to be educated. Men are using more grooming products on a more regular basis. The James Bond 007 fragrance, for example, sold very well.

Our shopfit and loyalty card are genderless, which has helped – a lot of men have our card.

MW: Do you compete with Superdrug, which is also owned by your parent company AS Watson?

KF: It works well – we collaborate. There’s group learning that takes place. AS Watson is good at best practice, whether that’s within a country, in the luxury division or across health and beauty. It takes learnings from areas and uses them to help other business units.

Obviously, we do compete in the fragrance market, but Superdrug builds its plan and what is right for its customers and we build ours.

The Perfume Shop magazine, Scents, has a circulation of 300,000

Our customer magazine Scents is a relatively new project. The first two issues had [Superdrug customer magazine] Dare content because the same content marketing agency produces both. However, the next issue is purely The Perfume Shop’s content. That is an example of where we have collaborated with Superdrug to get it off the ground but got to a point where we can move forward on our own.

MW: What are the advantages of having other similar brands in the AS Watson stable (see box, below)?

KF: The luxury division has Marionnaud [Europe’s largest perfumeries and cosmetics retailer], [perfume and cosmetics chain] ICI Paris XL, and us. I have monthly calls with those business units where we talk about best practice, suppliers and sales. We share learning across each of the country units.

Often, when you have a problem in one country, you will have the same problem somewhere else and someone may have found a solution to it. Or, there may be a collaboration going on – someone’s done something brilliant, let’s say with Procter & Gamble, and they’ll share it so another country can go and have a similar type of conversation.

MD: We also talk about customer relationship management. There are other business units with loyalty cards that have been around a long time and there are brands like us that are still in the early stages. We will discuss how they have tailored offers and how people have responded to it.

MW: What are the challenges of being part of a large parent company?

KF: The policies and procedures can trickle down and you have to comply with the group. AS Watson trades in many countries and each has a different business culture. In the UK, for example, we have the Bribery Act. In terms of the way AS Watson wants the businesses to behave, we abide by UK law, but other countries do not have the law and therefore need a policy in place to make sure everyone is consistent.

MD: On the brand side, it is the nuances around culture. Some communities might not understand some of the language and tone we use. If we are talking about something in a certain way, it’s the explanation that has to go with it, to get AS Watson to understand why we are doing it or what that means within the UK market.

MW: How do you approach celebrity collaborations?

MD: Our customer base starts at 12-year-olds. That has a lot to do with our store locations and selling a lot of celebrity scents. Kids are so brand savvy. They want Gucci and Dolce & Gabbana and perfume is a great introduction point. Usually, they get into celebrities before they get into brands. If we can give them a great experience the first time, we know they will keep coming back.

We are careful about what we do with celebrities – we’ve worked with Nicki Minaj and Peter Andre. We make sure it’s right for our customers and business. It is so trend-led, even more than fashion, and it can be risky. We are not a high-brow environment – we are accessible to everybody.

When doing personal appearances [by celebrities], one of the things we are keen to do is not go to the typical places. Why should it always be the Oxford Streets of the world that get the celebrities? We want to reach the kids in Scotland, who are spending all their hard-earned cash too.

MW: How are you integrating ecommerce and social media into your business?

MD: We are very active on Twitter and Facebook. We launched a Twitter feed a few weeks ago for The Perfume Shop’s bag. Our black and red branding is strong and the feed is about where you can spot TPS bags. It is separate to our shop account and enables us to get our brand personality across and add a bit of cheekiness – it is about growing brand awareness.

KF: The landscape in retail is changing fast in the UK. From an AS Watson point of view, there is a trend, particularly among young consumers, towards purchasing on mobile devices, tablets and through ecommerce. Part of our omnichannel strategy is doing it the right way for the customer, no matter how they want to purchase from us.

We can see our growth happening online and we can hear what’s happening in the marketplace, in terms of other retailers closing stores. Where will we travel to in the next couple of years? What shape, size and structure do we need to support that change? We have to plan that now.

In terms of our store strategy, we believe there are good locations available and if they are the right ones then we will take them. We are careful in our store selection. We have a shop in the Pallasades shopping centre in Birmingham that is trading well and has a loyal customer base [despite an awaited overhaul of the 1960s designs]. At the other end of the scale, we have stores in new shopping centres with other aspirational brands. Our shop fit is beautiful and of course footfall’s not an issue. It is about where is right for our consumer – it’s not always the bright, shiny shopping centre.

Big Business

The Perfume Shop is part of the AS Watson Group, which is owned by multinational conglomerate Hutchison Whampoa. AS Watson Group is the world’s largest health, beauty and lifestyle retailer with over 10,800 stores operating 20 retail brands in 33 markets worldwide. It is Europe’s largest luxury perfumeries and cosmetics retailer with more than 1,600 stores in 16 markets, operating under three retail brands – Marionnaud, ICI Paris XL and The Perfume Shop. The Perfume Shop also forms part of AS Watson’s health and beauty arm, alongside Superdrug and Savers in the UK. The Perfume Shop comes of age this year, with the celebration of its 21st birthday.

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